Construction loan.

Benefits.

Designed to be paid out in stages throughout your build.
Conditional approval¹ so you have time to plan your build.
Reduce your outgoings with interest only⁴ or no repayments³ during the construction period.
Start repaying the loan when the construction is finished.

How it works.

1

You can borrow up to 90%

Depending on the type of contract, we may lend up to 90% of the construction contract price².

2

Valuation

Depending on the amount you’re borrowing, you may need to provide a valuation.

3

Payments are made in stages

The loan is progressively drawn down as the builder invoices you. The money is usually paid direct to the builder or supplier and you only pay interest on the amount you’ve drawn.

4

Repaying the loan

During the project you only pay interest on the money already drawn down and you don't start repaying the principal itself until the project is finished⁴. A construction loan is usually on a floating interest rate during the construction period and can be fixed upon completion. You can fix the interest rate on drawn down portions of your loan twice during the construction period, if you want.

How much can I borrow?

If you need a loan to build a new home, the amount you can borrow depends on the value of your home, the type of your construction contract and your ability to repay the money.

Depending on the amount you’d like to borrow, you may need to get valuations at different stages of the project.

A word of caution: cost overruns are common during building work, so keep track of your budget as the project goes on. That way you can make adjustments as you go to make sure you can afford to finish.

Types of construction contracts you can get a Westpac construction home loan for.

Current rate.

See all interest rates

If you don’t pay amounts when they’re due, your loan account may exceed its limit and the rate of interest that’ll be applied to the overlimit amount will be the interest rate + 5% p.a.

Calculators.

Find the best option for you with our home loan calculators.

See all calculators and resources

Learn more about your options.

Get in touch.

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Things you should know.

¹ Conditional approval requires a credit check for all applicants, confirmation of the details provided in your application and responsible lending inquiries. Other conditions may also apply depending on the nature of your application.

² High LVR loans are only permitted for a new build with a single fixed price contract that specifies a completed, ready to live in property. We may require you to protect against loss of deposit, non-completion and workmanship risks with a satisfactory insurance product. A low equity margin may apply.

³ Interest costs will be added to your loan balance within the approved total limit of the loan and you will therefore pay more in interest in the long term. You must start paying principal and interest on the loan within 12 months of the first drawdown.

⁴ There are no principal payments required during the build process. With an interest only loan, you’re repaying only the interest amount as it accrues on your outstanding balance, and none of the principal. An interest only loan will cost you more interest in the long term because you're not paying off any of the principal during your interest only period. You must start paying principal and interest on the loan within 12 months of the first drawdown.

Interest rates are subject to change without notice. Westpac's home loan lending criteria, terms and conditions apply. A low equity margin may apply.

Documents and fees

View terms and conditions for all our home lending products here.